TN to Centre: Don't rush with constitutional amendment on GST

A constitutional amendment bill for roll-out of the new indirect tax regime has been introduced in the just-concluded parliament session

AIADMK ruled Tamil Nadu today asked Centre not to rush through constitutional amendment for Goods and Services Tax (GST), saying it will have "serious long term implications" on the fiscal autonomy and revenue position of the states.

Speaking at a pre-budget meeting of State Finance Ministers with Union Finance Minister Arun Jaitley, Tamil Nadu Chief Minister O Panneerselvam said, "This is not acceptable to us. We would rather suggest that Government of India should permit the Empowered Committee of State Finance Ministers to decide on these issues before the enactment of Constitutional Amendment Bill on GST."

A constitutional amendment bill for roll-out of the new indirect tax regime has been introduced in the just-concluded Winter Parliamentary Session by the Centre.

Panneerselvam also added that the Centre has already introduced the Constitutional Amendment on GST in the Lok Sabha without evolving a consensus with states on its critical aspects.

"We strongly urge the Government of India against hustling through the Constitution Amendment Bill hastily as such a move would bound to have serious long term implications" on the fiscal autonomy and revenue position of the states," the Chief Minister added.

He also mentioned that previous UPA government has agreed to compensate the states for revenue loss due to reduction of Central Sales Tax from 4 per cent to 2 per cent and pointed that the sum of Rs 7,098.88 crores still has to be reimbursed which is pending for the period up to March 31, 2012.

On mid-year plan transfer cuts, the Chief Minister said: "We feel that, in the anxiety to control fiscal deficit by the Government of India, arbitrary cuts should not be imposed on plan schemes, restricting the resources committed to states."

He also suggested that Centre should also set up an Infrastructure Fund for providing long term finance for more than 12 years to infrastructure projects in PPP mode.